California Pension Systems: Has the actuarial process failed?

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Rick Roeder, FSA       April 2020

A seeming contradiction has existed during the decade in which these surveys have been completed. There has not been even one instance of an entity increasing their assumed rate of investment return – despite a decade-long bull market. This raises two questions: Were assumed investment returns too high a decade ago? Are current assumed returns fully reflective of the timing and duration of the next bear market?